We the Capitalists? The Right Rediscovers the Rule of Law, Eight or Eighty Years Too Late

Across the conservative side of the internets – the part that looks more like a dumptruck, and less like a series of tubes – you’ll see frequently corny, and always flamboyant homages to the Constitution. Or, what they think is the Constitution.

These expressions are remarkable as much for their spontaneity (where were these “scholars” from 2000 to 2008?), as for their continuing selectivity. For example, you’ll never see TexasDarlin, Glenn Beck, etc., wax poetic over the Equal Protection Clause. No: their outrage is confined specifically to the Constitution’s economic implications, and always linked to anger over perceived “socialism.” It is altogether fitting, as the Fourth of July approaches, to examine these purportedly constitutional arguments, in some depth.

Most often, when right-wing bloggers invoke constitutional values, it’s in connection with (1) the bailout, (2) states’ rights viz. the bailout, (3) the defense of capitalism generally, (3) the “natural born citizen” clause, (4) the Tenth Amendment, or (5) judicial review. I’ve treated the last three points elsewhere (follow the internal links for more). But the theory that the Constitution enshrines a libertarian, Ron Paul-like notion of wholly unregulated capitalism deserves a rebuttal.

Before I start, I must note that neither I nor any proponent of “liberalism” or “progressivism” have any objection to capitalism. Who could? Competitive markets are the very reason for American hegemony, be it military, scientific, or (obviously) economic. That said, the American experience of the 19th century flatly rebuts the theory that unregulated capitalism is the solution to American problems. We need the FDIC; we need the Sherman Antitrust Act; we need the Securities and Securities and Exchange Acts. Period.

Nor does the Constitution require completely free markets. The Constitution is not an economic document. To paraphrase Justice Holmes, it enacts neither Spencer’s Social Statics nor Adams’ Wealth of Nations. See Lochner v. New York, 198 U.S. 45 (1905) (Holmes, J., dissenting). Indeed, the Constitution’s bulwarks against “socialism” are fairly light indeed, stemming from several basic concepts, now narrowly construed, rather than any overarching legal command.

First, Congress does have textual support for near-plenary control over the American economy. The drafters of the Constitution solved the most basic flaw of the Articles of Confederation by granting Congress the power to regulate commerce “among the several states.” U.S. Const, Art. I, § 8, cl. 3. The Supreme Court construes this power broadly – maybe too broadly – but no-one can seriously doubt Congress’ ability to regulate banks, securities, and the basic elements of the American economy. Compare Wickard v. Filburn, 317 U.S. 111 (1942) withU.S. v. Lopez, 514 U.S. 549 (1995).

Second, conservatives can claim that progressive taxation, and government spending, approximate or equal American “socialism,” in contravention of basic constitutional values. This is false. Congress is explicitly granted the power to lay taxes and spend money to promote the general welfare, with very few real restrictions. U.S. Const., Art. I, § 8, cl. 1; but see South Dakota v. Dole, 483 U.S. 203 (1987). Combine this with the previous point, and you’ve got the “Bailout Act” – done. Admittedly, the administration and internal veto provisions of the Act do pose some dangers to a formalistic model of the separation of powers, but it’s not clear who would have standing to challenge these violations. And, in any event, this nuanced and intelligent point has yet to be raised by any of the bailout’s opponents.

Nor does the Due Process clause vest in economic actors a right to be free from government intrusion. There was a time when it was just that kind of a safe haven. See Lochner, 198 U.S. at 45. Those days are over, so long as government regulation is “rational.” See West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937); see also U.S. v. Carolene Prods. Co., 304 U.S. 144 (1938). Welfare provisions like minimum wage laws are here to stay, and there’s nothing “socialist” about them.

Indeed, the Constitution mentions private property only twice in the entire document – first, in the “Takings Clause” of the Fifth Amendment, which nonetheless suborns property rights to the general welfare in some key situations, see Kelo v. City of New London,545 U.S. 469 (2005), and the Contract Clause, which prevents the government from “impairing the Obligations of Contract.” U.S. Const., Art. I, § 10, cl. 1. But this protection, too, is more illusory than real, and also can be defeated by a sufficiently compelling public need. Home Building & Loan Association v. Blaisdell, 290 U.S. 398 (1934). Socialism!!

At the root of the far-right’s sudden rediscovery of the Constitution is the idea that the Constitution sharply curtails government action on matters economic, or always prefers private property over public need. This may have been true in 1920. It is no longer true today, and we are better for it. The Constitution has changed over time, from a document that protected private property above all else, to a document that, today, protects minorities from legislative caprice and the “tyranny of the majority.” There’s nothing wrong with that. The Founders never intended to cryogenically freeze 1789’s America. Rather, they meant America to grow, within limits, beyond which the current administration has emphatically not transgressed.

[W]e must never forget that it is a Constitution we are expounding.McCullough v. Maryland, 17 U.S. 316, 407 (1819).

Sorry!

5 comments

A far more terrifying ism than socialism is what could be called Monopolism, which in the name of free marketing gives us the delights of AIG and non-competition. Ironically, freedom won’t work without controls and watchdogging.

The People’s Work…

Marius is a government attorney for a jurisdiction in the New York metropolitan area. His views may coincide with, but do not represent, those of the people of the state of New York, or his former clients.